Daily GPI / NGI All News Access

$2.72 Futures? Not So Fast

$2.72 Futures? Not So Fast

Fueled by a smaller than expected storage injection figure, natural gas futures continued higher yesterday morning as speculative buying easily erased the Wednesday evening price dip. The buying pressure continued throughout much of the day as bulls had their sights squarely set on last week's high of $2.72. Their persistence paid off, and shortly after 1 p.m. the prompt month punched through and notched a $2.75 high on the day. However, not enough follow-through buying was seen entering the market, and the resulting sell-off deposited prices back down near unchanged for the day. The August contract finished just a half-penny higher at $2.647.

"What a waste," commented one trader who almost felt sorry for the buyers who spent the entire day pushing prices higher only to see the market come crashing down late in the session. "They added to their length on each little pullback throughout the day, and that strategy was successful until it became apparent that the market wasn't going to settle above $2.72."

However, Ed Kennedy of Miami-based Pioneer Futures feels the market's ability to make a new high was constructive for prices and does not rule out a retest of the $2.72-75 level. But first the market may have to move lower and possibly as low as the mid- to upper $2.50s before such a rally is possible, he said.

But now that this week's AGA storage report (featuring a scant 26 Bcf injection) has been digested, bulls are starting to wonder when and from where the next piece of bullish news will come. A Gulf Coast marketer feels that fear of supply disruptions associated with hurricanes have helped prop up the market. "It's still pretty early in the season. There have been two hurricanes in the Pacific and two tropical storms so far in the Atlantic, but none of the have come close to us. September is supposed to be the busiest month for hurricanes and that is never far from people's minds."

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus